Landlord and tenant – Covenant for quiet enjoyment — Enfranchised property owner applying for consent from defendant management company for basement extension – Neighbours raising objections to application – Claimant holding lease of neighbouring property from defendant as landlord – Claimant applying for interim injunction to restrain trust from granting consent – Whether defendant’s exercise of powers under scheme breaching covenant for quiet enjoyment – Application dismissed
The defendant, a company by guarantee and a registered charity, was the manager under a scheme of management made under the Leasehold Reform Act 1967 in respect of properties in Hampstead Garden Suburb that had been enfranchised under the Act. In June 2011, the defendant received an application from the owner of one of the properties, in accordance with the scheme, for consent to carry out extensive works, including the construction of a single-storey basement under part of their rear garden to include a swimming pool. Notice of the application was sent to neighbouring properties, including the claimant’s property, which was located downhill from the application property. The claimant’s property had not been enfranchised but was held from the defendant as landlord under a 999-year lease from 1931.
Objections to the application raised by neighbours, including the claimant, were reported to the defendant’s property and planning committee. However, the committee took the view that the proposed extensions were acceptable for a house in that location, subject to further investigation on ground water movement to ensure that gardens belowthe property would not be affected as a result of the basement.
Between September 2011 and November 2012, the application remained under consideration by the defendant but no decision was taken. The defendant then informed the claimant that, in the light of expert advice, it was not in a position to delay issuing consent to the proposed development, subject to various conditions.
The claimant considered that the grant of consent would breach the covenant for quiet enjoyment in its lease. It applied for an interim injunction to restrain the defendant from granting consent unless and until certain steps had been taken, including the a basement impact assessment. The defendant made a cross-claim for summary judgment under CPR 24.
Held: The application was dismissed; the cross-claim for summary judgment was allowed.
(1) Once one or more of the regulations in the schedule to the scheme had been engaged, it was the defendant’s duty to consider the application in the light of the wider purposes of the scheme, and not to confine its attention to issues that related solely to the use, appearance and maintenance of the relevant enfranchised property. That wider focus enabled the defendant, in an appropriate case, to consider the effect of the proposed works on the character and amenities of other parts of the suburb, including neighbouring properties whose character and amenities might be adversely affected. Issues relating to the movement of ground water occasioned by the construction of a basement fell within that wider area of consideration. The defendant would be failing in its duty if it refused, on principle, to take them into account. There was no reason why, in an appropriate case, there should not be a requirement for a basement impact assessment.
However, it did not follow that the defendant should necessarily require a basement impact assessment. In deciding how best to proceed in a particular case, the defendant could legitimately decide, for example, that such issues would be better left for consideration by the local planning authority or that only certain aspects of them should be considered by the defendant. Considerations of expense, resources and the availability of suitable expertise to the defendant would all be relevant, as would the simple point that the main focus of the scheme schedule was on the use, appearance and maintenance of enfranchised properties.
(2) The defendant was acting as a custodian of the public interest, in the sense of the public interest in the amenities of the suburb, when it decided whether or not to grant consent for an application under the scheme: Zenios v Hampstead Garden Suburb Trust Ltd [2011] EWCA Civ 1645 applied. The covenant for quiet enjoyment in the lease was in standard form and the parties had to be taken to have envisaged that it could not be relied on so as to prevent or hinder the proper exercise of public duties in the public interest by a landlord in whom the freehold reversion might subsequently become vested.
The scheme had been made with statutory authority. Although the public interest in the present case was one of a local rather than a national nature, it was none the less a public interest and the defendant was its guardian.
If the proper performance of those public duties impinged on the normal use and enjoyment of the demised premises by the tenant, it must have been envisaged that the tenant would, to that extent, be deprived of a remedy under the covenant. The present action was not the proper means by which to resolve the dispute and no grounds had been shown for interfering with the decision-making process of the defendant.
Jonathan Seitler QC (instructed by Berwin Leighton Paisner) appeared for the claimant; Tom Weekes (instructed by Lee Bolton Monier-Williams) appeared for the defendant.
Eileen O’Grady, barrister
